Treasury, Home Affairs at odds on customs issues

Parliament will be debating in the new session in August the Border Management Authority Bill. What the Bill proposes is a single state entity known as the Border Management Authority (BMA) to oversee all aspects of the movement in the import/export of goods and to control movement of all persons either leaving or entering the country.

The idea is that all border law enforcement functions along South Africa’s fragmented 5,000 kilometres of border will be the responsibility of the BMA. Read More…… Border Management Bill July 2018 PDF

SARS role at border posts being clarified ….

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), were to “facilitate” the collection of customs revenue and fines by SARS staff present.

However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined and the matter of how SARS would collect and staff a border post was resolved.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they supported the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk until Treasury was satisfied on all points regarding their ability to collect duty on goods and how.

Keeping track

Most customs duty on goods arriving at border controls had already been paid in advance, parliamentarians were told; only 10% being physically collected at SA borders when goods were cleared.

However, with revenue targets very tight under current circumstances both SARS and Treasury have been adamant that it must be a SARS employee who collects any funds at border controls and the same to ensure that advance funds have indeed been paid into the SARS system.

The Bill, which enables the formation of the border authority itself, originally stated that it allowed for the “transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

Long road

It was the broad nature of transferring the responsibility customs of collection from SARS to the agency that caused Treasury to block any further progress of the Bill through Parliament, much to the frustration of past Home Affairs Minister, Malusi Gigaba. It has been two years since the Bill was first published for comment.

DHA have maintained throughout that their objective is to gain tighter control on immigration and improve trading and movement of goods internationally but Treasury has constantly insisted that customs monies and payments fall under their aegis. The relationships between custom duty paid on goods before arrival at a border to Reserve Bank and that which must be paid in passage, or from a bonded warehouse was not a typical DHA task, they said.

Breakthrough

It was eventually agreed by DHA that SARS officials must be taken aboard into the proposed structure and any duties or fines would go direct to SARS and not via the new agency to be created or DHA.

This was considered a major concession on the part of DHA in the light of their 5-year plan to create “one stop” border posts with common warehouses shared by any two countries at control points and run by one single agency. More efficient immigration and better policing at borders with improving passage of goods was their stated aim.

Already one pilot “one stop border post”, or OSBP, has been established by DHA at the main Mozambique border post by mixing SAPS, DHA and SARS functions, as previously reported.

To enable the current Bill, an MOU has been established with SAPS has allowed for the agency to run policing of SA borders in the future but Treasury subsequently baulked at the idea of a similar MOU with SARS regarding collection of customs dues and the ability to levy fines.Bill adopted

At the last meeting of the relevant committee, Chairperson of the PC Committee on Home Affairs, Lemias Mashile (ANC) noted that in adopting the Bill by majority vote and not by total consensus, this meant the issue could be raised again in the National Council of Provinces when the Bill went for consensus by the NCOP.

Objectives

The Agency’s objectives stated in the Bill include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.”

The Agency would also be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee, it was said.

Mozambique border

As far as the OSBP established at the Mozambique border was concerned, an original document of intention was signed in September 2007 by both countries. Consensus on all issues was reached between the two covering all the departments affected by cross-border matters.

Parliament was told at the time that the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, both bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years but these had to be paid before the goods entered the market or were exported, MPs were told. The licensee bore full responsibility for the duty and taxes payable on the goods.

State warehouses on the other hand, SARS said at the time, were managed by SARS for the safekeeping of uncleared, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

Slow process

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised. SARS said there were many ramifications at international law but added two discussions with Zimbabwe for the same idea had now taken place. It was hoped it would take less time to reach an agreement as lessons had been learnt with the Mozambican experience.

On evasion of and tax, SARS said in answer to a question that losses obviously occurred through customs avoidance and evasion, so it was consequently it was difficult to provide an overall figure on customs duty not being paid, as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified based on what had been seized.

The same applied to the Beit Bridge border with Zimbabwe where cigarette smuggling was of serious concern and through Botswana.

In general, it now seems that Home Affairs is to adopt an overall principle of what was referred to as having one set of common warehouses for one-stop declaration, search, VAT payment and vehicle movement with a SARS presence involving one common process for both countries subject to a final wording on the SARS issue before the Bill is submitted for signature.

Previous articles on category subjectBorder Authority to get grip on immigration – ParlyReportSAMozambique One Stop Border Post almost there – ParlyReportSA

Border controls for trade as well…..

A Bill enabling the formation of an overall border authority to be known as the Border Management Authority has reached Parliament following its publication for comment last October by the Minister of Home Affairs. The legislation will “allow for the transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

The Authority’s objectives include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.” The Authority would be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee.

Mozambique border

Three years ago, Kosie Louw, then chief legal officer at SARS, told Parliament that a “one stop border post” to handle customs and immigration was being established at the Mozambique border.

An original document of intention was signed in September 2007 by both countries and consensus on all issues was reached between the two covering all the departments affected by cross-border matters.
Kosie Louw told the standing committee at the time that on finance the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses, he said, which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily in order to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years, Louw said, but these had to be paid before the goods entered into the market or were exported. The licensee bore full responsibility for the duty and taxes payable on the goods, which could be removed only after all the customs requirements had been met.

State warehouses on the other hand, Louw said at the time, were managed by SARS for the safekeeping of uncleared,
detained, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised which to them seemed an unduly long period. The SARS response was that that were many ramifications at international law but he added they had already had two discussions with Zimbabwe at that time.

Slow process

South Africa, he said, was looking at the establishment of more such posts and it was hoped it would take less time to reach an agreement as many lessons had been learnt through the Mozambique experience.

SARS, said losses obviously occurred through customs avoidance and evasion, so it was consequently very difficult to provide an overall figure on customs duty not being paid as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified on the basis of what had been seized. The same applied to the Beit Bridge border with Zimbabwe, where cigarette smuggling was of serious concern.

The overall principle of what was referred to then as an OSBP was for both countries to have one set of common warehouses for stop, declaration, search, VAT payments to South Africa. involving therefore vehicles going through only one process for both countries.

It seems that the new Bill is building on that experience but the whole process is taking an inordinate period of time put down to the fact that so many departments in two or three countries have to be consulted and consensus obtained.Previous articles on category subjectHome Affairs gets tough on expired visas – ParlyReportSACustoms Duty Bill cuts out inland ports – ParlyReportSAHome Affairs fails on most targets – ParlyReportSA

Northern agriculture seen as visa defaulter…….

sent to clients 15 June…..Sam Morotoba, DDG of Public Employment Services, Department of Labour (DOL), told parliamentarians that it was DOL’s view that visa immigration policies for South Africa must involve cutting down on the flow of unskilled immigrants into the country.

From the nature of the debate, it was evident that DOL was more concerned on the creation of jobs for South Africans and not the issue of visa granting to specialist cases, a fact which gained the support of most MPs.

Sam Morotaba said that amongst the massive inflow of undocumented persons crossing what is some 4,000kms of border there were those that did find work, had no entry visa and were totally exploited in the process. Most of the border was totally “porous”, he said.

More facts emerged during the particular Labour Portfolio Committee meeting when both DOL and the Department of Home Affairs (DOHA) jointly made presentations on immigration policy. The practical aspects of the issue of work permits to foreigners, normally called “temporary visas” were discussed.

Not asylum seekers

Over 70% of the non-documented labour problem occurred in Limpopo Province, according to DOL figures. It was also shown that there were approximately 300,000 illegal immigrants in the country at present, whether they were working or not. Refugees from war and refugees seeking asylum were a completely different issue, Morotaba said, and they represented a much smaller number, .

Specially conducted “raids” on farms and businesses in the Northern areas and which were carried out by the few inspectorate staff that were available to DOL were frustrated by the advent of the cell-phone. Messages were simply sent ahead by immigrant employees advising that a “raid” was in progress and workers who had no documentation but wanted the work simply went into hiding.

Some employers told their employees not to come to work when appointments with DOL inspectors were made. “Raids”, in conjunction with South African Police Services,were extremely difficult to undertake unless the matter was serious enough to consider that a possible breach of the law had taken place.

Traffickers

The problem was exacerbated, said Morotaba, by traffickers that postured as labour “sellers” and went from farm to farm offering cheap labour in the form of immigrants without documentation looking for work. Inspectors had resorted to “raids” on Friday “paydays” and also at night. Employers were generally unhelpful; gaining access to farms was difficult; and the success rate in finding illegal immigrants was therefore low, said DOL.

Farmers remained the major culprits, it became apparent – an issue which has been the main theme of chairperson Lumka Yengeni of the Portfolio Committee on Labour for a number of years.

DOL said that there were more than five million legal immigrants in the country and the laws of South Africa demanded that all workers be protected, whether illegal or not, in terms of the Constitution. This had to be borne in mind, they said.

Desperate people

However, underpaying desperate people who had no temporary visa and housing them in filthy conditions, was quite a different matter and was a contravention of all international principles. This was the issue facing DOL.

Also, some companies and employers simply did not want to test the local market for labour suitability or could not be bothered to try, DOL said, and also probably also wanted to avoid UIF participation, collection and payment and few farmers got involved in the cost of skills training.

Home Affairs briefing

The main agenda of the portfolio committee meeting in question was the subject of the nature of relationships between DOHA and DOL. Also their observations were requested on the current position with regard to delays in issuing visas and DOHA was asked to give a technical explanation of where the visa issuance process was headed.

DOHA was represented Acting Chief Director for Visas, Home Affairs, Modiri Matthews, supported by Ronnie Marhule. Modiri Matthews said his department was mandated by the Immigration Act to deport those unlawfully in the country.

He made it clear that the Immigration Act stated that a temporary residence visa could be granted only for the categories of Study, Treaty, Business, Crew, Medical Treatment, Relatives, Work, Retired Persons, Exchange and Asylum.

It was only when a permanent resident permit was issued that the holder was entitled to live in South Africa on a permanent basis, with all the rights and obligations of a citizen except the right to vote and use an SA passport. This was standard in most countries, he said.

Visa classification

There were three kinds of visas – Corporate, General Work Visa and a Business Visa. Most farming entities and general business fell under the category of corporate visas, where a requested number of foreigners was needed by an employer.

Proof had to be supplied that despite a diligent search, the applicant could not find suitable SA citizens or permanent residents to occupy the positions; the job description had to be given; and it had to be conditional that salary and benefits paid would not be less than standard agreed emoluments.

Home Affairs confirmed that feedback indicated that the current system is too cumbersome due to DHA’s lack of capacity to handle the volume of applications; the fact that “standard operating procedures” within the department were ambiguous; that many officials were insufficiently trained and turnaround around times were too slow.

Speeding things up

Modiri Matthews promised parliamentarians that new electronic systems were in place to ensure a more secure system of interaction between DHA, DOL and Department of Trade and Industry (DTI) – the latter being responsible for issuing the quota or number of visas issued, all of which had expiry dates. The plan envisaged is that once the permission is issued by DTI, for DHA to take 30 days and DOL no more than 8 weeks to process a visa request and DHA to issue or decline.

When asked by MPs whether or not Home Affairs had a tracking system on visas granted but which had expired, whether working or not, Modiri Matthews responded that they had and the number of expired visas currently stood in the area of 30,000, which were on the tracking system.

Waiting period

Present at the meeting were also Ronnie Marhule, Acting Chief Director of Permits and Visas and Phindiwe Mbhele, Director for Corporate Permits and in question time, Angie Loliwe of the ANC complained to them that if the application were with DTI for even only 2 weeks, then the DOL process was added for thirty days and with Home Affairs adding about 8 weeks, there was not really any possibility of waiting less than three months for any one application to be processed at the very best. This was too long, she said.

Both Directors stated that there were “pressure points” mainly related to capacity to deal with the volumes of applications and this mainly affected “corporate” visas to farm workers. They told members of the Labour Committee that they were trying to deal with this, especially where urgent business applications were concerned.

They reminded MPs that with nearly 300,000 illegal immigrants, systems such as an “expired document” process was a time consuming business and DOL “had their work already cut out with the farming situation and inspections.”

One track discussion

Ninety per cent of the meeting time was spent discussing farm labour problems in the light of ANC problems with illegal labour entry to the North. Modiri Matthews said that there were only 11 centres in South Africa handling visa applications. There was a new office in Sandton, Johannesburg, he said, specifically geared to business needs.

To the irritation of some of the ANC members it was confirmed that the offices in East London and Port Elizabeth had been closed. There was only one office for the whole of KwaZulu-Natal. However, Matthews said there was was a specific plan to open two new business offices -presumed to be Cape Town and Durban.

Fines for expired visas not working…

sent to clients 21 Jan… Now that Parliament has resumed it will not be long before for the Portfolio Committee on Home Affairs considers public comment and input on amendments to the Immigration Act re-defining what the Department of Home Affairs (DHA) terms as “inadequate sanction on foreign persons who remain in South Africa after their visas have expired”.

The Committee is responding to the fact that it is the Minister’s opinion that fines on foreigners who overstay their welcome were not serving as a sufficient deterrent to cease the regular practice of non-residents to continue their stay beyond the expiry date of their visa.

Troublesome clause

Section 30 of the 2002 Immigration Act has already been amended a couple of times regarding either the wording itself, which has not stood up in court, or, in the opinion of the DHA is now insufficient in itself as a deterrent to the practice.

The wording of the last amendment had led to various interpretations and to quote the government gazette on the issue, “some holding the view that a foreigner must overstay a number of times to be declared undesirable while others hold the view that one instance of overstaying would result in a declaration of undesirable.”

Another way

The issue has now been approached in a different manner, which as far as can be established would deny the holder ever returning to SA unless agreed to by the Minister. The proposed changes amend the anchor Act so that foreigners who overstay after the expiry of their visas do not qualify for a port of entry visa, a visa, admission into South Africa or a permanent resident permit during the relevant prescribed period.

This would seem to establish that the offending foreigner has no status as a visa holder at all when it expires and that person immediately becomes an undesirable entrant by definition as any conditions of entry no longer apply. The implications of being declared an undesirable entrant under these circumstances will be debated.

Written comment expired

Once any comments are received, such will be part of a debate as to whether the amending Bill should be accepted as it stands, any amendments agreed upon made, voted upon and passed to the National Assembly for “reading”. Written comment addressed to Parliament was stated as being until 20 January 2016. Whether any hearings were agreed upon is awaited.Previous articles on category subjectHome Affairs gives reasons for visa changes – ParlyReportSAHome Affairs fails on most targets – ParlyReportSA

Smart card ID trials with banks

Despite a highly upbeat presentation by the department of home affairs (DHA) on the position with regard to the issuance of a smart card ID card to all citizens of South Africa, the actual final implementation of the full system using bank premises for issuance would still seem time away.

DHA said that in all, the new process involved the replacement of some 38m ID books involving a further 70 DHA offices or “booths” being created throughout the country which will also process new passports.

However, said DHA, to speed up the process; create greater access to the Smart Card issuance: reduce queues and, importantly, to reduce the whole timeline of eliminating the old bar-coded system, DHA was now working with the banking world with pilot propositions based on using the outreach of banks as well, in order to reach a greater proportion of the general public and speed up the process.

Payment and issuance at bank

So far, MOUs had been signed with FNB and Standard Bank to set up pilot “booths” at a number of trial bank locations in order to study the options and strategies to involve banks with the issuance of cards and possibly payment by swipe. Studies were also being conducted with the SA Post Office (SAPO).

DHA said the consideration of SAPO had arisen because of their “large footprint” in rural areas and, together with an evaluation with trials at the two banking pilots, the entire IT system developed by DHA for their own 407 outlets, would be tested, adapted and fine-tuned. National treasury would then be approached on the additional costs of including the four private sector banks and SAPO.

DHA’s own system in hand

The budget for DHA to handle the system alone and by itself was R120m. Contracts to card makers had been finalised in terms of a highly satisfactory and approved tender process.

MOUs with Nedbank and ABSA were now also being initiated, as an extension of the arrangements with the first two banks mentioned, in order to then involve all four major banking groups in South Africa to widen the whole process, the department said.

The matters being investigated at present were the entire security risk of such an operation, this being paramount to DHA; the possibility of online payment for application of documents produced; fingerprint and photos on site (an essential if the documents were to be collected later from the same location); and return of revenue and reconciliation of cash with DHA.

First and second class

DHA told parliamentarians that citizens would therefore have a choice between the DHA option, for which an ID would probably cost in the region of R140 and a passport R800, or at banks where no doubt a premium would have to be charged worked out after the pilot scheme was found to be workable or not.

Under questioning, particularly led by ANC chairperson Buoang Mashile, DA’s Mohammed Hoosen and ANC’s Bonsile Nesi, extreme circumspection was expressed on the involvement of SAPO ; the quality of its staff to handle highly sensitive and personal information; and the fact that some SAPO outlets only had two staff members in small stations and rural outlets. The recent SAPO strikes, where no mail was delivered for three months, added to their disquiet

DHA responded that they were highly conscious of this and a decision to involve SAPO was yet to be made from evidence collected.

DHA presence at banks

DA’s Hoosen also stated that “nothing ever came free from banks”. He expressed disbelief that the all four major banking institutions were seriously going to involve themselves in such monetary matters and reconciliations with DHA and integration of DHA staff on their premises for free.

DHA replied that what was being undertaken was a pilot which involved a “stand alone” DHA booth to handle information input, fingerprints and photos and that bank would accept monies and credit DHA as did some retail outlets with municipal matters. DHA staff would be involved.

Security of info

To some extent the DA were satisfied to hear the banks themselves did not deal with the personal details of applicants, leaving DHA as sole handler of the any information on their data capture system, as in the past. Nevertheless they asked for a “ball park figure” as an idea of what the private sector involvement would add to the cost of an ID and passport.

DHA responded that it might double the cost of a Smart Card ID and push passport costs well up to R1,500 but at this stage all was conjecture as the pilots with the two banks had only just started. If it was decided to go ahead, then the whole process would have to be costed before it went to National treasury for approval as a possibility and the involvement with the banks would have to be a “self reducing” exercise but faster.

Quo vadis?

On questions on the need to communicate with the public, DHA said the whole issue was early stages and in any case the process was a five to seven year plan and communications would come up only when the entire system was wrapped up and ready to go.

On the ability of DHA to handle such a national campaign of this magnitude, a number of MPs queried whether the department, as it was presently constituted, was able to handle such a programme. DHA said part of the plan involved the hiring of staff and a major focus was on an extensive training programme. DHA said they were used to handling such matters as elections and there were a number of common factors involved.

Fingerprints may overcome

The main areas of concern to DHA, the presenter said, was rather in the area of fingerprint verification where “swopping” between immoral staff and the public was concerned and outside scam organisers who deluded the public with false information but they felt that the photo verification system, when added, would eliminate most of the physical fraud possibilities in collection by the right person.

DHA said that in their experience, the areas of cutting, pasting and manual tasks were the areas that the risk analysis project had mainly to focus on. The risk analysis project was the vital undertaking that was being assessed at the moment,

When asked by members where the two pilots were being conducted, DHA said that this was being undertaken with Standard and FNB in Gauteng, who were helping with risk analysis.

SARS role at border posts being clarified …. In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border […]